Question

Problem 2-7A Preparing an income statement, statement of retained earnings, and balance sheet. LO P3 Angela Lopez owns and manages a consulting firm called Metrix, which began operations on March 1. On March 31, Metrix shows the following selected accounts and amounts for the month of March. Equipment Salaries expense Consulting revenue Cash Utilities expense Note payable Accounts receivable Common stock Dividends $ 5,500 3,300 13,500 8,600 260 2,700 3,800 12,800 2,300 Office supplies Rental revenue Advertising expense Prepaid insurance Accounts payable Note receivable Rent expense Unearned revenue $1,800 800 460 1,300 2,260 2,800 2,300 360 Required: 1. Prepare a March income statement for the business. 2. Prepare a March statement of retained earnings. The Retained Earnings account balance at March 1 was $0. 3. Prepare a March 31 balance sheet. Hint: Use the Retained Earnings account balance calculated in part 2. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a March income statement for the business.

Answer 1

Req 1. Income Statement $ $ 13,500 800 $ 14,300 Less Revenue Consulting Revenue Rental Revenue Total Revenue Expenses: Salaries Expense Utilities Expense Advertising Expense Rent Expense Total Expense Net Income $ $ $ $ 3,300 260 460 2,300 $ $ 6,320 7,980 Req 2. Retained Earning Statement Retained earning Beginning Balance Net Income Add $ $ $ $ $ - 7,980 7,980 2,300 5,680 Less Dividend Retained earning Ending Balance Req 3. Balance sheet For the year ended on March 31 Assets Liabilities Cash Accounts Receivables Office Supplies Prepaid Insurance Notes Receivables Equipment $ $ $ $ $ $ $ $ $ $ 2,700 2,260 360 5,320 8,600 Liabilities 3,800 Note Payable 1,800 Accounts Payable 1,300 Unearned Revenue 2,800 Total Liabilities 5,500 Stockholders Equity Common Stock Retained Earning Total Equity $ $ $ 12,800 5,680 18,480 Total assets $ 23,800 Total Liabilities & Stockholder's Equity $ 23,800